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The Taxing Agency in Your State Would Like to Impose

Question 136

Multiple Choice

The taxing agency in your state would like to impose a sales tax in a way that minimizes deadweight loss. To achieve this goal it should tax:


A) goods that are relatively inexpensive.
B) all goods equally.
C) goods whose supply and demand curves are relatively inelastic.
D) goods but not services.

Correct Answer:

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